The ESOP Communications Sourcebook

Preface
Introduction
What Is an ESOP?

Part I: Using Communication Materials
Communicating ESOPs
Rolling Out Your ESOP: What to Say, When, and How
What You Have to Communicate—and What You Should
Sharing Financial Information
Communication and Cultural Issues for New ESOP Companies
The Ownership Incentive
Four Steps to Building Better Business People
Breaking Down the Barriers to ESOP Communications
Communicating with Employee Owners in Tough Times
Marketing Employee Ownership
Telling Your Employee Ownership Story to the Press

Part II: Sample Communication Materials
The History of ESOPs
ESOP Design for Employee Owners
Who Runs an ESOP?
Why Can't I Vote?
When Do I Get Paid?
What If the Company Is Sold?
What Are Leveraged ESOPs?
How Your ESOP Gets Stock to You
ESOPs and Corporate Performance
Keeping Plans Fair
Does Employee Ownership Guarantee Job Security?
Understanding the P/E Ratio
Understanding the Taxation of ESOP Distributions
Understanding Basic Business Terms
Understanding Stock
Planning for Retirement When You Are an ESOP Participant
Understanding Common and Preferred Stock
Understanding Cash Flow
Understanding Corporate Taxes
Understanding Company Contributions
Understanding Vesting
Understanding Public and Private Companies
Understanding the Stock Market
Understanding Valuation
Understanding Dividends
Understanding the Board of Directors

Appendixes
Appendix 1: Sponsoring Consultants
Appendix 2: CD Contents
Appendix 3: Customizing and Using the PowerPoint Presentations
Appendix 4: Viewing Webinar Replays

CD Contents
(1) Every handout in Part II, "Sample Communication Materials"
(2) 60 sample communications documents from ESOP companies (click here for a list)
(3) 4 customizable PowerPoint presentations:
- ESOP Basics
- Communicating Valuation
- ESOP Landscape
- A Visit on Communications
(4) Case studies of two ESOP companies with strong communication programs
(5) 5 Webinar replays:
- ESOP Basics
- Communicating Your ESOP
- Marketing Tools and Employee Ownership
- Minimizing Cynicism in Employee-Owned Companies
- The NCEO ESOP Communications Template

From "Rolling Out Your ESOP: What to Say, When, and How"

If your ESOP goals include enhanced employee motivation and improvements to the bottom line, one of the most important steps in your rollout strategy will be providing detailed employee education about the ESOP and how it is linked to the performance of the business as a whole.

Assuming that you have conducted an ESOP kickoff meeting along the lines described in Step 1, employees will be familiar with its basic terms. However, few will take the initiative to develop a more meaningful understanding on their own, and most will still be very confused about the goals, rules, and opportunities of employee ownership. Thus, a more detailed ESOP and basic business education initiative follows.

The ESOP portion of this training follows the same general outline as the ESOP kickoff meeting described above. This time around, you will provide much more substantial detail, more supporting documentation, and engage employees in actually learning and remembering more. Companies have used many models and formats, ranging from simple PowerPoint™ presentations, to highly involved participant role-play exercises, to online Web/intranet training seminars. The content and process will depend on the goals that you set in your leadership planning process. If your ESOP is designed only as an add-on benefit plan, your education goals will focus on teaching employees the basic ESOP rules. If your ESOP is designed also to engage employees in improving your business now that they own a piece of it, your education goals will include some basic business education. The content will depend on how well employees already understand core issues, such as business strategy, financial statements, and performance improvement goals. Many other training activities may follow on these and related topics, particularly as your business evolves and employees need to understand how changing markets, technology, etc., are affecting your company's future strategy and direction.

Most effective training follows established principles of adult education: the material is concrete, it relates directly to attendees' personal experience, it is interactive (rather than in a lecture format), and it provides information that attendees can use immediately. This learning is most successful when conducted in relatively small groups of eight to 15 employees, and each group represents a cross-section of the work force. Training sessions should be long enough to cover real content, but not so long that employees lose focus. Two to three hours typically works best in our experience. This means that each training session can be repeated several times at each site each day, depending on the size of the work force at each location, shift schedules, and the number of physical locations in your company.